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NOTICE This opinion is subject to further editing and
modification. The final version will
appear in the bound volume of the official reports. |
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No.
95-0223-D
STATE OF WISCONSIN : IN SUPREME COURT
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In the Matter of Disciplinary Proceedings Against KENNETH L.
GROVER, Attorney at Law. |
FILED NOV
1, 1995 Marilyn L. Graves Clerk of Supreme Court Madison, WI |
ATTORNEY disciplinary proceeding. Attorney's license suspended.
PER
CURIAM. We review the recommendation of the referee that the
license of Kenneth L. Grover to practice law in Wisconsin be suspended for 60
days as discipline for professional misconduct. That misconduct consisted of his failing to clearly communicate a
fee agreement with a client in a worker's compensation matter, charging that
client an excessive fee, and failing to represent him competently. In addition to the license suspension, the
referee recommended that Attorney Grover be required to refund to the client
that portion of the fee he collected to which he was not entitled, plus
statutory interest on that amount.
We
determine that the recommended license suspension is appropriate discipline to
impose for Attorney Grover's misconduct established in this proceeding. We also order Attorney Grover to make the
reimbursement recommended by the referee.
It appears from the record that Attorney Grover's failure to adequately
communicate to his client the matter of his fee and his charging a fee far
greater than that provided by statute resulted not from Attorney Grover's
intent to obtain more of a fee than that to which he was entitled but from his
inexperience and unfamiliarity with the worker's compensation laws.
Attorney
Grover was licensed to practice law in Wisconsin in 1952 and practices in
Stevens Point. He has been disciplined
for professional misconduct on three prior occasions: in 1980 he was privately reprimanded by the Board of Attorneys
Professional Responsibility (Board) for failing to keep adequate records of
personal dealings with clients, thereby creating the appearance of impropriety;
in 1981, he was privately reprimanded by the Board for failing to file proposed
findings, conclusions and judgment in a divorce action within the time
specified by statute; in 1988 the Board publicly reprimanded him for neglect of
client matters.
Following
a disciplinary hearing, the referee, Attorney David Friedman, made the
following findings of fact, most of which Attorney Grover admitted in his
answer to the Board's complaint. In
June, 1988, Attorney Grover was retained to represent a client who had
sustained injuries in an industrial accident at his place of employment. At the initial meeting with the client,
Attorney Grover stated that he could receive only $100 for services in the
worker's compensation matter but could get a fee of 20 percent of any recovery
on a third-party claim brought in connection with the injury.
In
March, 1989, Attorney Grover wrote to the worker's compensation insurer
mentioning his attorney's lien for his fee in the matter and asking whether the
insurer believed there was third-party liability of either the client's
employer or the manufacturer of the machine that caused his client's
injury. In response, the insurer began
withholding 20 percent of the client's weekly temporary total disability
benefits it was paying. Attorney Grover
then clarified to the insurer that he was claiming a statutory lien only in
respect to any permanent disability benefits his client would be entitled to
receive.
In
July, 1989, the insurer reported to Attorney Grover that, based on a
physician's report and according to a benefit calculation worksheet, the client
was entitled to permanent partial disability benefits of just over $22,500 and
that the insurer would withhold 20 percent of that amount for Attorney Grover's
fees. The insurer then paid the client
some $3600 in accrued benefits.
When
he wrote his client asking whether he was satisfied with the physician's
report, Attorney Grover stated that even if the client settled with the
insurer, a third-party action could be brought against the manufacturer of the
equipment or against the employer. The
client did not challenge the physician's finding and the worker's compensation
claim was resolved on an uncontested basis.
When
Attorney Grover and the client subsequently discussed the fee in the matter,
Attorney Grover told him he owed 20 percent of the recovery. The client responded that he believed the
fee would be only $100 but when Attorney Grover insisted, the client gave him a
check for $3000, written on the proceeds from the accrued benefits check he had
received.
When
the insurer told him it would not release the withheld benefits as his fee
without an order of the Department of Industry, Labor and Human Relations,
Attorney Grover asked DILHR to release the fees, stating that the 20 percent of
the recovery he was charging did not apply to the client's monthly benefits
received while recuperating off the job, for which he would charge the client
only $100. DILHR then asked Attorney
Grover for a copy of a signed fee agreement and an explanation of how the
client's benefits were in dispute, as its file did not indicate that the claim
had been disputed.
After
receiving that information, Attorney Grover told his client that DILHR required
a retainer agreement and on October 23, 1989, had his client sign an agreement
reciting that it had been entered into the preceding June and setting forth
that the client might wish to bring a third-party action against his employer
or its compensation insurer, for which the client agreed to pay Attorney Grover
20 percent of the amount at which his claim were compromised or of the amount
collected.
In
July, 1990, Attorney Grover told the insurer he was abandoning any claim of
attorney's lien on the withheld benefits and the insurer sent those funds to
the client. The following day, at
Attorney Grover's request, the client signed a paper authorizing Attorney
Grover to proceed with an action against the employer, specifically holding
Attorney Grover harmless from any claim the client might have in the event he
were to lose his job as a result of bringing that action.
Several
times in early 1991, Attorney Grover asked his client whether he wanted to
bring a third-party action against the employer and told him that the October,
1989 retainer agreement was "in the nature of" an agreement for the
client to obtain worker's compensation under the applicable statutes. When the client told him he did not want to
bring a third-party action against the employer, Attorney Grover stated that,
on the basis of the retainer agreement, he was entitled to 20 percent of the
amount of benefits paid by the insurer.
Accordingly, he claimed the client owed him $4500, acknowledging that
his services rendered in the matter did not support a fee in that amount but
insisting that the retainer agreement provided for it.
As
the client had already paid him $3000, Attorney Grover offered to split evenly
the balance he claimed was owing to him, and the client sent him a check for
some $600. Because no third-party claim
was filed on behalf of the client and because the 20 percent figure specified
in the statute relates only to contested benefit claims, the referee found that
Attorney Grover was not entitled to receive fees based on the retainer
agreement specifying the statutory 20 percent figure.
On
the basis of those facts, the referee concluded that Attorney Grover failed to
communicate the fee agreement with his client, in violation of SCR 20:1.5(b),[1]
in that he did not adequately explain the basis on which his fee would be
calculated. The referee noted that this
was the first time the client retained an attorney. The referee also pointed out that the retainer agreement did not
make clear how the $100 statutory limit on attorney fees for uncontested claims
related to the 20 percent fee specified in the retainer agreement.
The
referee further concluded that Attorney Grover charged the client an excessive
fee in respect to the potential third-party claim, in violation of SCR
20:1.5(a).[2] As it was uncontested that Attorney Grover's
record of time and expense on the matter totaled $1170 and that the client had
paid Attorney Grover in excess of that amount, the referee concluded that
Attorney Grover was overpaid in the amount of $2763.24.
The
referee also concluded that Attorney Grover failed to represent his client
competently in respect to any third-party claim he may have had, in violation
of SCR 20:1.1.[3] In that respect, the referee had found that
Attorney Grover did not pursue inquiries he had made concerning his client's
injury and made no effort himself to locate the manufacturer of the equipment
that had caused the injury but relied on his client and the compensation
insurer to pursue those inquiries.
The
referee rejected the Board's contention that Attorney Grover engaged in deceit
or misrepresentation in his dealings with the client in this matter. While the referee acknowledged that the
Board clearly established Attorney Grover's inability to effectively
communicate with his client and his inexperience in the area of worker's
compensation, he found no clear and satisfactory evidence that the lack of
precise communication rose to the level of deceit or misrepresentation.
We
adopt the referee's findings of fact and conclusions of law. As discipline for the professional
misconduct established by those facts and conclusions, we impose the license
suspension and restitution recommended by the referee.
IT
IS ORDERED that the license of Attorney Kenneth L. Grover to practice law in
Wisconsin is suspended for a period of 60 days, commencing December 4, 1995.
IT
IS FURTHER ORDERED that within 60 days of the date of this order Kenneth L.
Grover make reimbursement to his client as recommended by the referee in this
proceeding.
IT
IS FURTHER ORDERED that within 60 days of the date of this order Kenneth L.
Grover pay to the Board of Attorneys Professional Responsibility the costs of
this proceeding, provided that if the costs are not paid within the time
specified and absent a showing to this court of his inability to pay the costs
within that time, the license of Kenneth L. Grover to practice law in Wisconsin
shall remain suspended until further order of the court.
IT
IS FURTHER ORDERED that Kenneth L. Grover comply with the provisions of SCR
22.26 concerning the duties of a person whose license to practice law in
Wisconsin has been suspended.
WILLIAM
A. BABLITCH, J., did not participate.
SUPREME COURT OF WISCONSIN
Case No.: 95-0223-D
Complete Title
of Case: In the Matter of Disciplinary
Proceedings Against
Kenneth L. Grover,
Attorney at Law.
_______________________________
DISCIPLINARY PROCEEDINGS AGAINST GROVER
Opinion Filed: November 1, 1995
Submitted on Briefs:
Oral Argument:
Source of APPEAL
COURT:
COUNTY:
JUDGE:
JUSTICES:
Concurred:
Dissented:
Not Participating: BABLITCH, J., did not participate
ATTORNEYS:
[1] SCR 20:1.5 provides, in pertinent part: "Fees
. . .
(b) When the lawyer has not regularly
represented the client, the basis or rate of the fee shall be communicated to
the client, preferably in writing, before or within a reasonable time after
commencing the representation.
[2] SCR 20:1.5 provides, in pertinent part: "Fees
(a) A lawyer's fee shall be reasonable. The factors to be considered in determining
the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill requisite to perform the
legal service properly;
(2) the likelihood, if apparent to the client,
that the acceptance of the particular employment will preclude other employment
by the lawyer;
(3) the fee customarily charged in the locality
for similar legal services;
(4) the amount involved and the results
obtained;
(5) the time limitations imposed by the client
or by the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of
the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.